Payment Bond Claims: How Subcontractors Get Paid — Blog

On public construction projects, you cannot file a mechanics lien against government property. Instead, subcontractors and suppliers are protected by payment bonds. The general contractor is required to post a payment bond that guarantees payment to parties further down the payment chain. Understanding how to make a claim against this bond is essential for anyone working on public projects.

What Is a Payment Bond

A payment bond is a surety bond purchased by the general contractor and backed by a surety company. It guarantees that subcontractors, sub-subcontractors, and material suppliers will be paid for their work on the project. If the general contractor fails to pay, the surety company steps in to cover the obligation, up to the bond amount.

Payment bonds are required on federal projects under the Miller Act and on most state and local projects under corresponding state laws known as Little Miller Acts. The bond amount typically equals the full contract price.

Who Can Make a Payment Bond Claim

Not everyone on a project has the right to claim against the payment bond. Federal Miller Act claims are available to:

First-tier subcontractors who contract directly with the general contractor
Second-tier subcontractors and suppliers who contract with a first-tier subcontractor

Parties further down the chain, such as third-tier subcontractors, generally do not have payment bond rights under federal law. State laws vary and may extend or restrict who can claim.

Notice Requirements for Bond Claims

Depending on your position in the payment chain and the governing law, you may need to send preliminary notice before you can file a bond claim:

### Federal Projects (Miller Act)

First-tier subcontractors do not need to send preliminary notice. Second-tier subcontractors and suppliers must send written notice to the general contractor within 90 days of their last day of furnishing labor or materials. The notice must state the amount claimed and identify the party who hired them.

### State and Local Projects

Requirements vary significantly by state. Some states mirror the Miller Act structure, while others impose additional notice requirements or different deadlines. Always research the specific requirements for the state and project type before proceeding.

Filing the Bond Claim

If payment is not received after proper notice, you can file a formal claim against the payment bond. The process involves:

Sending a written demand to the surety company and the general contractor
Including documentation of the amounts owed: invoices, delivery records, and the subcontract
Providing proof that notice requirements were met
Allowing the surety a reasonable period to investigate and respond

The surety company will investigate the claim, which typically involves reviewing project records and communicating with the general contractor. If the claim is valid, the surety will authorize payment.

Deadlines for Bond Claim Lawsuits

If the surety does not pay, you have the right to file a lawsuit to enforce the bond claim. Under the Miller Act, the lawsuit must be filed no earlier than 90 days and no later than one year after your last day of furnishing. State deadlines vary and may be shorter or longer.

Tips for Successful Bond Claims

Send preliminary notice even when not strictly required, as it strengthens your position
Maintain detailed records of all labor, materials, and deliveries
Invoice promptly and follow up on unpaid invoices immediately
Keep copies of your subcontract and all change orders
File the claim as soon as the payment becomes overdue rather than waiting

Manage Bond Claims With LienShield

LienShield tracks your notice and filing deadlines for payment bond claims on public projects. The system generates compliant notice documents, monitors response timelines, and ensures you never miss the window to enforce your rights against the bond.